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Triffin v. Prudential Property and Casualty Insurance Company of New Jersey

A-4070-02T2 (N.J. Super. App. Div. 2004) (Unpublished)

CHECKS; HOLDER IN DUE COURSE—Being a holder in due course of a dishonored check doesn’t override the fact that a check may be counterfeit.

The assignee of two checks sued an insurance company, as the drawer of the checks, for refusing to honor the checks. The insurance company argued that it was not required to honor the checks because they were counterfeit and the facsimile signatures on the checks were unauthorized. The assignee contended that the facsimile signatures on the checks were exact replicas of the signatures actually used by the insurance company. He also asserted that he was a holder in due course of the checks and therefore the insurance company was obligated to honor the checks. The lower court granted summary judgment in favor of the insurance company and the assignee appealed.

The Appellate Division affirmed the lower court’s ruling. On appeal, the assignee argued that his status as a holder of due course imposed an absolute duty on the insurance company to honor the checks even if the checks were counterfeit. The Court agreed that the assignee was a holder-in-due course, but being a holder in due course doesn’t override the fact that the checks were counterfeit. A drawer has no duty to honor a counterfeit check.


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